The Institutions of Authoritarian Neoliberalism in Malaysia: a Critical Review of the Development Agendas Under the Regimes of Mahathir, Abdullah, and Najib

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The Institutions of Authoritarian Neoliberalism in Malaysia: a Critical Review of the Development Agendas Under the Regimes of Mahathir, Abdullah, and Najib Aktuelle Südostasienforschung Current Research on Southeast Asia The Institutions of Authoritarian Neoliberalism in Malaysia: A Critical Review of the Development Agendas Under the Regimes of Mahathir, Abdullah, and Najib Bonn Juego ► Juego, B. (2018). The institutions of authoritarian neoliberalism in Malaysia: A critical review of the development agendas under the regimes of Mahathir, Abdullah, and Najib. Austrian Journal of South-East Asian Studies, 11(1), 53-79. After toppling the 61-year dominant Barisan Nasional through a historic election victory in May 2018, expectations are high for the new ruling government led by Mahathir Mohamad and the Pakatan Harapan to fulfil their promises for socio-economic reforms and regime change in Malaysia. But what have been the institutions of the prevailing regime that need to be reformed and changed? This article offers a critical review of the evolving devel- opment agendas since the 1990s of the successive governments of Mahathir Mohamad, Abdullah Badawi, and Najib Razak, each couched in different catchphrases: Wawasan 2020, Islam Hadhari, and 1Malaysia. A close reading of these programs suggests that their substance articulates two persistent logics: the ruling elite’s constant requirement for political stability enforced by a strong state; and, the need to adapt to the demands and opportunities of accumulation in specific phases of Malaysia’s capitalist development in the context of globalization. The analysis reveals the attempts at maintaining authoritar- ian neoliberalism, or a neoliberal economy embedded in an authoritarian polity, as the de facto social regime in contemporary Malaysia. By examining policy documents, speeches, and news reports, the article discloses how this regime had been enunciated or reified in public discourses, policies, and actions of the respective administrations. Keywords: Abdullah Badawi; Authoritarian Neoliberalism; Mahathir Mohamad; Malaysia; Najib Razak INTRODUCTION www.seas.at doi 10.14764/10.ASEAS-2018.1-4 www.seas.at Malaysia’s 14th general election (GE14) on 9 May 2018 was a historical turning point in the country’s politics. It marked the end of the uninterrupted electoral dominance of the Barisan Nasional (BN, or the National Front) coalition – partic- ularly its major party, the United Malays National Organisation (UMNO) – which had governed the country since independence from Britain in 1957. It also paved the way for Mahathir Mohamad to return to premiership at the age of 92 after his first long stint as prime minister in 1981-2003. In a surreal political moment, Mahathir emerged as the leader of the opposition coalition Pakatan Harapan (PH, or Alliance of Hope) in partnership with his old critics and enemies, notably Anwar Ibrahim and Lim Kit Siang. He challenged his former friends and allies in the UMNO/BN coalition led by his protégé, then incumbent premier, Najib Razak. Eventually, the Mahathir-led opposition pulled off an electoral upset on a ASEAS 11(1) | 53 The Institutions of Authoritarian Neoliberalism in Malaysia campaign platform that promised institutional reforms, anti-corruption, democracy, rule of law, and a range of populist economic policies (including the revival of fuel subsidies, increase in minimum wage, and the abolition of the controversial goods and services tax). Yet, any reform efforts by the new ruling government will have to proceed from the existing structures and institutions in Malaysia’s socio-economic environment that have been adapted and forged by UMNO/BN in the last 60 years. The purpose of this article is to take stock of the historical trajectory of Malaysia’s contemporary development policies. In doing so, the article reveals a compelling insti- tutional pattern in the structure of the country’s political economy in which ethnic and other social relations are embedded. This is important to understand in the cur- rent context when the new government under Mahathir enjoys a popular mandate to undertake comprehensive reforms. The prevailing institutions in Malaysia’s political economy that are unpacked in this article can be considered: firstly, as a structural reflection of the ‘initial conditions’ where reform initiatives begin; secondly, as a ‘nor- mative indicator’ of the specific policies and practices that must be reformed; and thirdly, as a ‘benchmark’ against which the processes towards the objective for regime change are to be monitored and evaluated. Historically, the political-economic attributes of Malaysia have been a mesh of a strong state and a relatively open market economy since the colonial period (De Micheaux, 2017; Tajuddin, 2012). Politically, Malaysia has had strong features of authoritarianism where the general citizenry has been deprived of at least the proce- dural requirements of fair elections, equal privileges before the law, and a modicum of civil liberties and human rights (Case, 1993; Gomez & Jomo, 1997; Zakaria, 1989). Economically, Malaysia’s open economy is manifested in its pragmatic – rather than theoretical – adaptation of trademark neoliberal policies of privatization, liber- alization and deregulation, as well as in its active production, trade, and financial activities in the world market. Even though laissez faire economic policies in Malaysia became more prominent since independence, the British state had already set in train in colonial Malaya the rudiments of the capitalist institutions that structured the unequal relations between classes and ethnicities (Nonini, 2015; Stubbs, 2004). The New Economic Policy (NEP) of 1971-1991 combined state intervention for the reduc- tion of inter-ethnic disparity with the empowerment of private sector activity in the development process. By the 1980s, intensified privatization and deregulation ini- tiatives and other structural adjustments through the Malaysia Incorporated Policy were undertaken (Gomez & Jomo, 1997). This article examines the evolution of Malaysia’s political economy through an analysis of the post-NEP development strategies undertaken by successive govern- ments since the 1990s, namely: Mahathir Mohamad’s Wawasan 2020, Abdullah Badawi’s Islam Hadhari, and Najib Razak’s 1Malaysia. The analysis is done through an inductive approach derived from examining, as well as making extensive references to official policy documents, the speeches of the prime ministers, and news reports. The article suggests that the changing slogans from administration to administra- tion are essentially articulations of two persistent and interdependent logics. The first logic is the incessant need of the ruling elites for a strong state to safeguard social and political stability. The second logic is the consistent stance of the elites in government to adapt to the evolving accumulation demands and opportunities 54 | ASEAS 11(1) Bonn Juego at particular periods in Malaysia’s capitalist development. This is manifested by the series of adjustments in the country’s development plans in accordance with the shift in neoliberalism’s policy emphasis. In general, neoliberal development strategies have shifted from the so-called Washington Consensus during the 1980s-1990s to the Post-Washington Consensus by the mid-1990s. The Washington Consensus had a rather limited focus on open market economy through macro-economic programs of privatization and liberalization. The Post-Washington Consensus has a broader and more comprehensive set of policies focused on competitive capitalism through deep- seated institutional reforms and behavioral changes – lodged in the agendas on good governance, competition cultures, labor market flexibility, human capital, and social capital (Cammack, 2006; Fine, 2001a, 2001b). Against the background of globaliza- tion, Malaysia’s national development policies have been adapted to specific phases of neoliberalism and the changes in the geopolitical economy, in particular: 1. Mahathir-style neoliberalization-with-industrialization during the 1980s-1990s, in between the paradigm shift from a declining Keynesian developmentalism and an emergent Washington Consensus; 2. Abdullah’s agenda for a ‘moderate’ Islamic capitalism in the aftermaths of the 1997 Asian financial crisis and the 9/11 terror attacks; and 3. Najib’s strategy for competitiveness as a response to the 2008-2009 global economic recession, the decline of oil prices in the world market in 2014, and the new scramble for capital from the rise of China. The article’s analysis reveals the apparent attempts of the governing elites at maintaining a peculiar form of regime which can be referred to as authoritarian neo- liberalism – that is, a neoliberal economy embedded in an authoritarian polity. As the de facto social regime in Malaysia, the aims and strategies of authoritarian neolib- eralism across the tenures of Mahathir, Abdullah, and Najib had remained roughly consistent: (1) operating a strong state; (2) managing social conflicts; and (3) perpetu- ating a type of neoliberalism that expands the economy in a changing global context while enriching entrenched local elites. By charting the discursive mutations of Malaysia’s authoritarian neoliberalism, the article puts forward an interpretation which has implications for a number of important contributions from regime studies and transitions literature. In regime studies, the debate whether to categorize Malaysia as a ‘developmental state’ depends on how this concept is defined (Stubbs, 2009). Some analysts have classified Malaysia as a developmental state (Embong, 2008; Jomo, 1997, 2001) or a semi-developmental
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